Relief initiatives flooded with need

Applications for $52 million come in within hours after Northern Initiatives receives MEDC loan funding of $2 million.
All sorts of main street businesses were eligible to apply, including hard-hit in-person businesses such as restaurants, coffee houses, retail and service providers, which were most impacted by COVID-19. Photo by iStock

A community development financial institution (CDFI) that serves 77 Michigan counties was quickly overwhelmed with inquiries after receiving $2 million in loan funding from the Michigan Economic Development Corporation (MEDC).

MEDC on Tuesday, April 14, announced the Michigan Strategic Fund approved various streams of emergency assistance in response to economic hardships caused by COVID-19.

“We are committed to leveraging every resource available to us as effectively as we can to support small businesses, entrepreneurs, communities and workers across the state being negatively affected by this unprecedented outbreak,” said Mark Burton, CEO of the MEDC. “The initiatives approved by the Michigan Strategic Fund will provide much-needed resources for small businesses … facing challenges with cash flow and communities working to support and protect their residents.”

Marquette-based Northern Initiatives — a CDFI regulated by the U.S. Department of Treasury that makes business loans to existing and startup businesses, primarily in underserved rural markets throughout Michigan, including West Michigan — had been working since the fall to secure $2 million in loan funding from the MEDC’s Capital Access Program, unrelated to COVID-19.

However, now that Northern Initiatives has received the funding, it will be directed to assisting businesses adversely impacted by the pandemic, according to Elissa Sangalli, senior vice president and incoming president of Northern Initiatives.

Northern Initiatives will use the funds to make micro and small business loans ranging from $5,000 to $250,000 to Michigan’s small businesses in the 77 counties it serves, with an emphasis on women- and minority-owned businesses.

“That is our typical loan size range,” said Dennis West, outgoing president of Northern Initiatives who is retiring in June. “We have done them as small as $1,000, $250,000 is the max for Community Advantage, and our average is around $60,000.”

Sangalli said Northern Initiatives was blown away by the number of inquiries it received after the loan fund was announced.

“Within the first 15 hours of the MEDC (announcement), we received 758 inquiries and requests for $52 million. We stopped taking inquiries for the MSF loan funds and are sorting through what we have. There is a tremendous amount of need,” she said.

Sangalli said all sorts of main street businesses were eligible to apply, including hard-hit in-person businesses such as restaurants, coffee houses, retail and service providers, which were most impacted by COVID-19.

Businesses that are approved for a loan can use the funds primarily for working capital, acquiring machinery and equipment, and inventory, according to the MEDC.

“The Northern Initiatives program is yet another step we are taking to ensure that businesses impacted by COVID-19 — especially those in geographically disadvantaged areas — receive the support and relief they need to come out on the other side of this crisis successfully,” Burton said.

Sangalli said the staff at Northern Initiatives is working to quickly select the awardees for the $2 million in loan funding as it waits for disbursement from the MSF.

Other opportunities

In addition to the loan funding for Northern Initiatives, the MSF Awardee Relief Initiative program was approved April 14 and authorizes emergency relief to businesses and community projects that have previously received grants, loans or other forms of economic assistance from the Michigan Strategic Fund. The program will temporarily allow measures such as extended milestone due dates for up to a year, providing up to a year of deferred payments on financing agreements with MSF and eliminating or reducing job creation requirements with a proportional reduction of the grant award to re-size the project scope.

This program would be available to support any MSF program awardee that is negatively financially impacted by the COVID-19 crisis. Applicants will be evaluated with relief prioritized based on suspension of tenant evictions, income loss, credit enhancement needs or restrictions, retooling of facilities to meet emergency needs, job creation issues, job retention issues or other community needs or project delays due to COVID-19.

Projects must also suspend owner distributions during the period of relief other than those that cover payroll and taxes. The length of relief will be determined based on the needs of the individual project.

The MSF board also authorized approval of awards on a delegated basis, rather than require the vote of the full board, in order to ensure immediate approval to projects during the crisis. The program will be temporary, with plans to sunset after one year and will not involve disbursement of any additional funds to any awardee.

For more information on the MSF Awardee Relief Initiative, visit

The board also approved $3 million in Pre-Seed III funds to be administered by Michigan State University Foundation to better support entrepreneurs and tech startups across Michigan over a one-year period.

This funding will support the MSU Foundation in engaging with pre-seed stage companies by providing capital support, coaching, assistance with grant funding and more. The award of this Pre-Seed Fund is “especially critical right now,” MEDC said, “considering the impact that COVID-19 continues to have on Michigan’s early-stage tech companies.”

The fund will be vital in providing the best support possible to early-stage technology companies to help put them on a path to survive the economic crisis and scale accordingly when the outbreak subsides.

Other resources for businesses across Michigan to assist them in recovering from economic losses as a result of the COVID-19 virus can be found online at

The site includes resources offered by the U.S. Small Business Administration including emergency loans, the Pure Michigan Business Connect virtual procurement and donation platform, support services offered through the Small Business Development Center and more.

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